Here is the latest exclusive Lean Manufacturing Blog Q&A With Jim Womack, author of Lean Solutions and founder of the Lean Enterprise Institute. We did an extended Q&A late last year, and here are some new responses to our questions to Jim, based on his latest newsletter (full text here).
Q: With “The Machine That Changed The World,” there was a clear and widely recognized problem to be solved, via lean production. Are business leaders outside of manufacturing recognizing the need to improve and, for example, to not waste their customers' time?
A: All change starts with one person or a small group. What I see today is lots of experiments in lots of industries. But I'm confident that these will succeed and that the trend toward lean solutions will grow. The reason will not be that companies suddenly want to be nice to their customers. Instead, it will be the discovery by some trail blazer that doing the right thing for customers actually costs less than doing the wrong thing. (For example, the Simao car dealer chain in Portugal — featured in this week's Automotive News by the way — discovered that they could cut the time customers spent on repairs more than in half while reducing Simao's cost of providing the typical repair by 30%. And that 30% dropped directly to the bottom line.) As the word spreads that lean solutions are good for greedy capitalists as well as consumers, I guarantee that they will be adopted. And…it only takes one trailblazer in any industry — the Toyota if you will — to force every other player to pay attention. Still it often takes a generation — as we are seeing in auto manufacture — before everyone gets with the program or gets out of the industry.
Q: In your latest newsletter, you state:
“Finally, a lean management system involves managers at every level posing the key problems that need to be solved and asking the teams they lead to develop and implement the answers.”
How can people be creative and take risks when they fear mass layoffs?
A: When a company waits until very late in the game to embrace lean principles — and Ford has waited very late indeed — there are only two choices: fewer jobs or no jobs. So every employee has a choice to make: Participate in leaning of the business knowing that they may be out but the company will survive or sit on their hands (or even sabotage change) so that everyone is out. That's a hard choice and everyone will need to chose. The pity is that this choice was really unnecessary if senior management had had its head in the game years ago when there were more options.
Q: You suggest that they do so, but car companies say its too expensive to simplify model lines.
A: O.K. It's cheaper to go bankrupt instead? The folks in MoTown need to understand — as Sloan did in the early 1920s after GM skated around bankruptcy, risking Sloan's own fortune — that this isn't normal times. The situation calls for kaikaku (revolution) rather than kaizen (evolution). So, whenever I hear MoTown executives say that some action is desirable in principle but impossible in practice, I say: “Well in that case — if it's really that difficult — it's important to start immediately!” Contrast their reaction with Carlos Ghosn when he got to Nissan: He slashed half the models under development to rationalize their product range, arguing there were no resources to get a kazillion derivative products done, told the suppliers that they weren't going to live higher on the hog than Nissan but wouldn't be asked to accept more pain than Nissan either, and closed the facilities that needed to be closed in a country where “we never close anything because we believe in lifetime employment.” And…people were so happy to hear a “way forward” that was actually a way forward that they played with their hearts and saved the company. That will work in MoTown too.
Q: You ask “but what will really happen?” Will you make any forecasts about the chances for GM, Ford, or Daimler Chrysler to implement any of your suggestions?
The future is in our hands, not in the hands of a mindless machine. So…what happens depends on who emerges to lead and who decides to follow. As I have said, lean thinkers don't believe in forecasts and I have none to make. But…it sure is getting late in the day.
Q: Why try to fix Ford, GM, and Daimler Chrysler? Shouldn't we just encourage Toyota, Hyundai, Nissan, etc. to continue growing in the U.S.? That growth would create jobs and tax revenue. Should government policy be neutral about what automakers grow in this country, or should government do something to help “the Big 3”?
I'm not trying to “fix' anything and I strongly suggest that governments let the competitive process play out without interference. But…there is a human dimension here: An enormous number of employees of the big car companies and their suppliers have had their expectations about their careers and their retirement dashed and many more lie in harms way. The best ending would be for the MoTown team to get its act together, play a brilliant, lean game as the only “way forward” and produce a new equilibrium in the industry.
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